Joint Finance Committee to Discuss Rehired Annuitants

May 17, 2013 — Michelle Felber

The Joint Finance Committee will meet Tuesday, May 21 to discuss the Departments of Employee Trust Funds, Children and Families, and Public Instruction; the Office of State Employment Relations; the State Building Commission; and the Public Finance Authority. Budget papers for Tuesday are here.

The committee will consider Governor Scott Walker’s proposed changes for rehired annuitants in the Wisconsin Retirement System (WRS). Under current law, WRS annuitants are allowed return to state employment after a 30-day break-in-service and continue to receive his/her annuity. Those annuitants are not eligible for group insurance benefits and cannot add time to their years of service.

The governor favors increasing the break between retirement and rehiring from 30 to 75 days. Walker also recommends that rehired annuitants who work more than two-thirds full-time be ineligible to receive annuity payments. Those employees must rejoin the Wisconsin Retirement System and add to their years of service.

State Representative Duey Stroebel (R-Cedarburg) introduced legislation this session with more restrictions than the governor’s proposal. Stroebel’s bill, AB 170, requires retired annuitants who work at least half-time to forgo their annuity payments. His bill also includes a 75-day break-in-service requirement, but does not allow the participant to accumulate additional years of service.

The Legislative Fiscal Bureau (LFB) prepared an analysis of the issue for the Joint Finance Committee in advance of next week’s hearing (Budget Paper #259). The budget paper includes data from a 2012 Legislative Audit Bureau (LAB) report, Wisconsin Retirement System (WRS) Annuitants Hired by Employers Participating in WRS.

The LAB report found that almost 79 percent of rehired annuitants had a separation period of 60 days or more, despite claims that many employees return to work almost immediately after retirement. More than half of rehired annuitants work for less than one year after being hired, and just 1.5 percent were employed for more than 4 years after retirement. The Audit Bureau also found that almost 80 percent of employees work fewer hours per week than they did before retirement, and more than 90 percent earned the same or less than they did before retirement.

Rehired annuitants are common on UW System campuses, making up almost 68 percent of the total of rehired annuitants between 2007 and 2011. At UW-Madison, many retired faculty return to work to complete research on grants. Changes to the way annuitants are rehired could have a serious impact on campus, and PROFS has met with many key legislative leaders to inform them how the bill could adversely affect UW-Madison.

The Fiscal Bureau has suggested five alternatives for the Joint Finance Committee to consider on Tuesday:

  • Approve the governor’s recommendation.
  • Modify the governor’s recommendation.
  • Approve the provisions of Representative Stroebel’s bill.
  • Delete the provision and maintain current law.
  • Delete the provision and make additional changes.

The committee may choose one of the options above or introduce a different motion altogether.

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Walker: Tuition Freeze & Lapse Reinstatement for UW System

May 16, 2013 — Michelle Felber

Governor Scott Walker announced his revised budget recommendation for UW System yesterday in a letter to the co-chairs of the Joint Finance Committee. The letter, from Department of Administration Secretary Mike Huebsch, does not mince words:

“. . . UW System asserted that the results of the 2011-13 reductions would be increased time to degree, reduced student services and loss of economic development opportunities. However, considering the findings of the April 19 memorandum, these assertions now simply appear inaccurate and untruthful, and that UW System was more interested in protecting its bank account than ensuring a quality higher education. The Walker Administration is saddened that UW System did not show leadership during a fiscal crisis, and instead made the burden of a public higher education heavier while stockpiling cash.”

Walker now recommends a two-year tuition freeze for all UW System campuses, a net $42 million cut to UW System. The governor also decided to no longer exempt UW System from permanent lapse cuts, a reduction of $65.7 million over the biennium.

Finally, the governor is directing UW System to fund several economic development and job creation efforts through its program revenue block grant, rather than with new money as originally proposed. UW-Madison will need to allocate $3.75 million for the Carbone Cancer Center and $3 million for the Wisconsin Academy of Rural Medicine program.

The Joint Finance Committee has not announced when they will meet to discuss the revised recommendations, but action is expected by the end of May. The committee may vote to make deeper cuts to the governor’s original budget proposal or remove management flexibilities that were given as part of the 2011-13 biennial budget.

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Poll: More in State Support Governor’s Proposal for Increased UW Funding

May 14, 2013 — Michelle Felber

Departing UW-Madison professor Charles Franklin released a Marquette University Law School poll today, offering data on a range of topics including the University of Wisconsin System.

Franklin found that 76 percent of state residents support a tuition freeze. Lawmakers from both sides of the aisle have called for a freeze after learning of a $650 million budget surplus.

The state was divided, however, on cuts to Governor Scott Walker’s recommended $181 million increase to the UW System budget. Slightly more respondents (50 percent) supported maintaining the governor’s recommendations, while 44 percent favored reducing the proposed increase.

The poll also found that the state is deeply divided over the expansion of private school vouchers and public school funding, and the majority of respondents do not favor borrowing money to pay for highway projects as Governor Walker has proposed.

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Joint Finance Committee Update

May 9, 2013 — Michelle Felber

The Joint Finance Committee is meeting today to discuss several state agencies and departments, including the beleaguered Wisconsin Economic Development Corporation, Veteran’s Affairs, the Wisconsin Technical College System, and the Government Accountability Board. The committee will also consider Governor Scott Walker’s proposal to end residency requirements for municipal employees. A full list of today’s budget topics and papers is here.

The committee will meet next Monday and Wednesday, May 14 and 16. The Departments of Administration, Corrections, and Workforce Development are among the agencies on the agenda Monday. The committee will discuss the Departments of Administration, Revenue, Natural Resources, and Agriculture, Trade and Consumer Protection along with the Offices of Secretary of State and Treasurer on Wednesday.

Action on the University of Wisconsin System has not been scheduled, but Governor Scott Walker is expected to announce an errata to his original request for UW System in the next few days.

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State Revenue Projections Improve

May 9, 2013 — Michelle Felber

The Legislative Fiscal Bureau announced today that the state will take in $575 million more than expected over the next two years. The LFB memo detailing the general tax fund revenue projections is here.

Governor Scott Walker and legislative leaders quickly said they would like the surplus revenues to go toward K-12 school aid and tax relief:

  • Governor Walker: “The surplus and increased revenue projections should be invested in aid for our schools, lowering income taxes for middle-class families, holding the line on property taxes, and building our rainy day fund.”
  • Representative Dale Kooyenga (R-Brookfield): “Our promise is to give Wisconsin taxpayers the largest possible income tax cut that we can afford. The revenue numbers released today put us one step closer to accomplishing that goal.”
  • Representative John Nygren (R-Marinette), co-chair of the Joint Finance Committee: “We would like to increase (K-12) funding by $100 per pupil. We have listened to the citizens that spoke out during public hearings throughout Wisconsin and to our colleagues.”
  • Minority Leader Chris Larson (D-Milwaukee): “Today’s revenue estimate increase must be used to restore a portion of the $1.6 billion from our neighborhood, public schools in the last budget.”
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Obama: Sequester Hurting Scientific Research

May 7, 2013 — Michelle Felber

President Barack Obama told a gathering of scientists last week that the across-the-board budget cuts known as sequestration could harm scientific research for several years. The president made his remarks at the 150th annual meeting of the National Academy of Sciences in Washington, D.C. on April 29.

“Instead of racing ahead on the next cutting-edge discovery, our scientists are left wondering if they’ll get to start any new projects, any new research projects at all over the next few years, which means that we could lose a year, two years of scientific research as a practical matter because of misguided priorities here in this town.

With the pace of technological innovation today, we can’t afford to stand still for a year or two years or three years.  We’ve got to seize every opportunity we have to stay ahead.  And we can’t let other countries win the race for ideas and technology of the future.  And I say that, by the way, not out of just any nationalistic pride — although, obviously, that’s part of it — but it’s also because nobody does it better than we do when it’s adequately funded, when it’s adequately supported.”

The sequester has resulted in about a five-percent reduction in federal agency spending, with greater cuts expected next year if changes are not made. President Obama has called for increased spending in the sciences — his 2014 budget included a one-percent increase for scientific endeavors and he told a gathering at the White House Science Fair that he would like to see the investment in research increase to levels not seen since the space race of the 1960’s.

Video of the speech is here.

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Joint Finance Committee Begins Voting

April 30, 2013 — Michelle Felber

The Joint Finance Committee began voting on the 2013-15 biennial budget last week, and voting continues today. A cumulative list of budget papers is here.

On Friday, the committee discussed the Departments of Military Affairs, Natural Resources, and Tourism. A proposal by the Governor to move the Child Abuse and Neglect Prevention Board from the Department of Children and Families to the Department of Administration was rejected. The committee also approved a motion to cut 32 DNR positions that are currently vacant, but rejected a motion by Democrats to increase the Tourism budget by more than $3 million dollars.

Today, the committee is discussing the Departments of Veterans Affairs and Transportation, the Historical Society, State Fair Park, an Budget Management and Compensation Reserves. JFC voted unanimously to reject Governor Scott Walker’s $3.7 million plan to take over Circus World Museum, instead maintaining the management structure that has been in place for more than 50 years. The committee also voted down a $12.1 million request by the Department of Administration to cover possible increases in state employee fringe benefits.

The committee will meet on May 9 after adjourning today. Action on the University of Wisconsin System has not been scheduled.

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State Building Commission Delays Vote on UW Projects

April 25, 2013 — Michelle Felber

The State Building Commission decided yesterday to delay a vote on all but one University of Wisconsin building projects. A list of UW items on the April agenda is here. Projects previously approved, including funding for the Babcock Hall Dairy Plan addition and Meat Science and Muscle Biology Lab and planning for the Chemistry addition, were not on the agenda and remain on track.

Governor Scott Walker and Republican leaders of the committee said they were concerned about the recent discovery that UW System has a $1 billion surplus and wanted to wait a month before voting on the projects. State Senator Fred Risser (R-Madison) voiced his objections over the delay noting the issues are not related.

The committee did approve a request to update fire alarms at UW-Eau Claire.

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Governor Walker Says He Will Make Changes to UW Budget

April 25, 2013 — Michelle Felber

Governor Scott Walker said yesterday that he intends to make changes to his 2013-15 biennial budget recommendation for the University of Wisconsin System. Details are expected in the next seven to ten days. The governor’s original budget proposal for UW System included $181 million for cost-to-continue and economic development efforts.

In a letter to the co-chairs of the Joint Committee on Finance, the governor wrote the changes are “in light of the revelations regarding the University of Wisconsin System’s reserves.”

Earlier in the week the governor said he supports a tuition freeze for the next biennium, but did want additional cuts to his proposed budget. Walker’s remarks came at press conference in Milwaukee where he spoke about his recent trip to China, noting the 90-percent increase in students from China studying at UW-Madison over the past four years. The governor also said that Wisconsin’s trade with China increased over the same time period  and that China is an important trade partner for the state.

A Walker spokesman would not say if the governor now supports a decrease in his original $181 million proposal.

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PolitiFact on UW System’s “Reserves”

April 24, 2013 — Michelle Felber

Leaders of the University of Wisconsin System have faced a firestorm of criticism since the Legislative Fiscal Bureau reported last Friday that System holds more than $1 billion in financial reserves. The report found that UW System had a cash balance of $1.35 million on June 30, 2012, with nearly $650 million in unrestricted monies.

Republican backlash from the discovery was fierce and swift with a handful of legislators calling for the removal of UW System President Kevin Reilly. The Joint Committee on Employment Relations met yesterday to discuss proposed personnel systems for UW System and UW-Madison but instead used the meeting to grill Reilly and UW-Madison Chancellor David Ward.

PolitiFact Wisconsin examined the issue in today’s Milwaukee Journal Sentinel. Here’s what they found:

  • $1 billion is the amount of program revenue that was on hand at the end of FY 2012. Forty percent of that is from tuition revenue, with the remainder coming from federal aid, grants, and gifts.
  • $648 million is in the form of unrestricted money.
  • $441 million is unrestricted but is being held in reserve for specific future needs.
  • $207 million is remaining.
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